Thursday February 21 2019, Weekly News Digest

household debt

News Comments Today’s main news: SoFi launches SoFi Invest. LendingClub forecasts bigger-than-expected Q1 loss. RateSetter ISA exceeds first-year expectations. Zopa report reveals 1 in 3 brits don’t understand Cash ISA Rate. October surpasses 100M GBP in loan repayments. Today’s main analysis: LendingClub 2018 results and 2019 guidance. Today’s thought-provoking articles: The highest seriously delinquent auto loans ever. Personal loans could […]

The post Thursday February 21 2019, Weekly News Digest appeared first on Lending Times.

household debt

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

SoFi launches SoFi Invest and eyes additional lending products (Business Insider), Rated: AAA

US-based online personal money management startup Social Finance (SoFi) has launched an investment product, dubbed SoFi Invest, offering both active and automated investing options at no fees, while it plans to offer additional lending products, perBloomberg, citing a company letter to investors.

SoFi Invest is already live, but the company aims to further grow and develop its related offerings this year.

Source: Business Insider Intelligence

SoFi Now Offering No-Fee Brokerage for Stock and ETF Trades (Think Advisor), Rated: A

According to Bloomberg, which obtained a copy of a letter CEO Anthony Noto wrote investors in the fourth quarter, SoFi Invest had “released an alpha version” of its new brokerage platform inviting employees and select members to “buy and sell individual stocks and ETFs with the tap of a button.”  That brokerage platform is now available to anyone using the app, for no fee.

Investors can currently trade only individual stocks and ETFs on the platform; individual bonds and mutual funds are expected to be added in the future.

LendingClub forecasts bigger-than-expected first-quarter loss (WSAU), Rated: AAA

Online lender LendingClub Corp forecast a bigger-than-expected first-quarter loss on Tuesday, and revenue that missed Wall Street estimates, sending its shares down 5 percent in after-market trading.

For the first quarter, the company expects net revenue between $162 million and $172 million, below analysts’ estimates of $181.2 million, according to IBES data from Refinitiv.

LendingClub also forecast a first-quarter loss between $20 million and $15 million, compared to Wall Street estimates of a loss of $5.14 million.

LendingClub Reports 2018 Results and Guidance for 2019 (Lend Academy), Rated: AAA

Earnings season is in full swing and today LendingClub announced their results for the 2018 year. The numbers were quite strong in most areas with the company originating $10.9 billion in new loans in 2018, up 21% year over year and a new high water work in yearly originations. For Q4 loan originations were $2.87 billion down slightly from the previous quarter but up 18% year over year.

Source: LendingClub

They lost $128 million in 2018 with a $13 million loss in Q4.

Source: LendingClub

Brismo partners with LendingClub to create ‘industry standard’ performance metrics (PR Newswire), Rated: A

Brismo, the leading international provider of lending performance data, has today announced that standardized performance metrics are available representing the performance of loans made available through LendingClub*.

Lending Performance Analytics

Brismo’s analysis includes a complete historic track record in a format that is free from distortions relating to inconsistent facilitation growth rates or default profiles.

Functions available include:

  • Gross facilitation, net lending, change in outstanding principal
  • Outbound lending rates and loan term
  • Late payments including transition matrices, defaults, recoveries, recovery performance, and net loss
  • Historic PDs and LGDs
  • Net return, loss coverage and risk adjusted return
  • Cohort analysis including return projections
  • All analysis can be segmented by facilitator, risk band, asset type etc.

Highest Auto Delinquencies (PeerIQ), Rated: AAA

The Fed’s latest report on Household Debt and Credit showed that total household debt increased by $32 Bn (0.2%) to $13.54 Tn in 4Q2018, marking the 18th consecutive quarter of growth. Total debt is now $869 Bn higher than its previous peak, although it remains below its peak on a per-capita basis.

The report also showed that more than 7 Mn auto loans are delinquent for more than 90 days. This is the highest number of seriously delinquent auto loans ever and is driven mainly by subprime borrowers. Over 8% of subprime borrowers are seriously delinquent on their auto loans, but this percentage is still well below its peak of 9.7% seen in 2010.

Source: PeerIQ

In FinTech financing news, Nav a small-business lending marketplace, raised $45 Mn from GS Principal Strategic Investments among others. Nav will use the funds to expand its platform and to support more funding partners.

CommonBond, an online student loan refinancer, has raised a $750 Mn credit line from GS, Citi among others. CommonBond will use this credit facility to expand its lending operations.

Personal Loans May Increase Credit Scores of Most Borrowers (LendingTree), Rated: AAA

Americans are increasingly turning to personal loans as another option for their ongoing debt and credit needs. There are many uses for personal loans, and the most prominent are to consolidate existing debt and pay down credit cards, which often carry higher interest rates.

Key findings

  • About 62% of borrowers see their credit scores go up the month after they take out a personal loan.
  • After 12 months, around 45% of borrowers still have higher scores than they did in the month of loan origination.
  • People with lower scores are more likely to see a credit score bump: 68% of those who started with scores under 620 saw their scores increase in one month, 71% had higher scores after three and six months, and 58% had higher scores after a year.
  • People with scores under 620 saw a 20 point, or 3.4%, boost after one month. They also saw a 10 point, or 1.8%, boost after 12 months, on average.
  • On the other end of the spectrum, borrowers who started with higher scores are less likely to see a credit score bump. 57% of people with scores of 750 or higher see their scores increase after a month, and about 39% have higher scores after a year.

FinTechs Continue to Drive Personal Loan Growth (GlobeNewswire), Rated: AAA

The FinTech revolution has propelled unsecured personal loans to another record-breaking quarter. TransUnion’s (NYSE: TRU) Q4 2018 Industry Insights Reportfound that personal loan balances increased $21 billion in the last year to close 2018 at a record high of $138 billion. Much of this growth was driven by online loans originated by FinTechs.

FinTech loans now comprise 38% of all unsecured personal loan balances, the largest market share compared to banks, credit unions and traditional finance companies. Five years ago, FinTechs accounted for just 5% of outstanding balances. As a result of FinTech entry to the market, bank balance share decreased to 28% from 40% in 2013, while credit union share has declined from 31% to 21% during this time.

TransUnion also found that FinTechs are competitive with banks, with both lenders issuing loans averaging in the $10,000 range, compared to $5,300 for credit unions. Across all risk tiers and lender types, the average unsecured personal loan debt per borrower was $8,402 as of Q4 2018.

Source: TransUnion

Personal loan originations increased 22% during Q3 2018, marking the fourth consecutive quarter of 20%+ annual origination increases. While the subprime risk tier grew the fastest, prime and above originations (those with a VantageScore 3.0 of 661 or higher) represented 36% of all originations. More than 19 million consumers now have a personal loan ­product, an increase of two million from a year earlier in Q4 2017 and the highest level ever observed.

Source: TransUnion

LoanStreet’s New Commercial Lending Solution Combines Automation and Networking for Financial Institutions (PR Newswire), Rated: A

LoanStreet Inc., the first fully integrated platform that streamlines the process of sharing, managing and originating loans, now offers a new, powerful commercial loan origination and administration solution for any size financial institution, loan or deal volume. LoanStreet uniquely combines the power of networking financial institutions together with world-class lending technology that automates administrative tasks to drive growth, diversify risk, and enable lenders to better serve their customers.

Leading Small Business Lending into a Digital and Data Driven Age (LendIt), Rated: A

Small business lending contributed to 24% of the loans originated by US Banks in 2018, accounting for 600 billion last year. Small business lending by large banks remains in legacy mode with deeply entrenched manual processes, a siloed experience and a lack of customization to help meet the unique needs of small business owners.

How a $ 1.3 Billion Institution Launched Its Own Digital Bank (The Financial Brand), Rated: AAA

When IncredibleBank, the online banking division of Wisconsin-based River Valley Bank, made the list of “Top 10 Online Banks”  at GoBankingRates.com, it found itself in good company, right alongside Ally Bank, CIT Bank, Discover Bank, and Synchrony.

While not the only community bank on the list, it’s a significant accomplishment for an institution with only $1.3 billion in assets. And equally noteworthy, IncredibleBank is the only digital-first bank offering loans for luxury RVs. These motor coaches — the ones the size of a tour bus with slide-outs that turn them into 1,200 square foot homes — run upwards of $2 million.

The challenger banks catering to gig-economy workers (American Banker), Rated: AAA

Qwil

Reinsch’s startup, Qwil, focuses on providing working capital for the freelancer who has trouble, like he did, getting paid on time.

Source: American Banker

Qwil’s underwriting technology assesses the payor’s likelihood of paying. It captures information about the approval status of the invoice: Is it definitively approved, is it likely to be approved or is it simply booked and not approved? It conducts identity verification and fraud checks on each freelancer. Qwil charges a flat fee for the advance, such as 1% of the amount. No interest rate or late fees are charged. And it never goes after the freelancer or small- business person to collect.

Oxygen

Online lenders like OnDeck, Kabbage, Fundbox and Bluevine all look at accounting software data and bank account data to analyze the cash flow of and qualify small business applicants. But the freelancer graphic designer working in a Starbucks or contract copy writer can’t get this type of loan, Ahmed said.

Oxygen’s banking and lending services are bundled into a membership with a flat monthly fee of $29.99.

Ahmed wouldn’t say how many users Oxygen has. The company, which started in a Y Combinator incubator, has been in production since September has been growing users at an 80% monthly rate.

Cogni

Cogni will offer a checking account and debit card, as well as up to 12% cash back at restaurants and retailers. It will provide “curated financial and lifestyle services” in an app designed for millennials, freelancers and side hustlers.

Joust

This month, Joust started a partnership with the Freelancers Union, which has 425,000 members. In a survey, the union found that 71% of its members have trouble getting paid. It also announced an Android version of its app (it had only iOS before).

For a 1% fee it offers a guarantee the payment will be made within 30 days. For a 6% fee it will instantly fund the invoice. Users can also take out PayArmour loans when they are out of work. Eventually Joust plans to provide gap financing for those in-between times.

When Considering Banks, New Survey Finds That Millennials Prefer Technology To Human Touch (Marqeta Email), Rated: A

Millennials are unattached to traditional banks, with only 17% of them expressing firm commitment to their current banking provider,  according to new survey data from Marqeta, whose advanced payments infrastructure and open-API platform has pioneered a new standard for modern card issuing. In this research, Millennials (18-34 year olds) were 50% less likely than Baby Boomers (50-65 years old) to say that they couldn’t ever imagine wanting to change their banks.

Marqeta’s research found:

  • Only 1-in-6 Millennials said they couldn’t imagine ever wanting to change from their current bank.
  • 58% of Millennials would consider banking with Amazon, Facebook or Google if these tech giants enter the banking space.
  • 48% of Millennials said they’d consider moving to an independent digital-only bank.

Millennials Are Digital Banking Early Adopters

More than half of Americans aged 18-34 (53%) have used mobile wallets to complete a purchase in-store or on their mobile phone. That’s higher than Americans aged 35-50 (39%) and more than double those aged 51-65 (22%).

It’s also noteworthy that:

  • More than half of Millennials (52%) said they were comfortable using TouchID and FaceID to authorize mobile wallet payments — almost double the number of Baby Boomers (29%) who said the same.
  • More than twice as many Millennials (57%) than Baby Boomers (27%) said that they have used peer-to-peer banking apps like Square Cash or Venmo.
  • Millennials (49%) were twice as likely as Baby Boomers (20%) to pay someone back using a peer-to-peer banking app than a physical currency like cash or check.

Banking Apps Are More Valuable Than Tellers to Millennials

When asked about what the most important service their bank provided was, Millennials reflected much different attitudes than older Americans: Millennials were twice as likely as Baby Boomers to list a mobile app as most important (27% v 14 %), while Baby Boomers were twice as likely to list in person presence (20% v 11%).

Millennials are also abandoning old-fashioned payment methods like checks en masse, with almost half (48%) saying that they couldn’t remember the last time they wrote a check for something other than utilities and rent.

Banks Set To Invest In Legacy Systems To Combat Challenger Bank Threat (Fintech Finance), Rated: A

More than three-quarters (80%) of bankers believe challenger banks are an increased threat to their business, while almost one-third (30%) believe they will be the single most disruptive threat in 2019. The survey, commissioned by fintech provider Fraedom, found that in response the challenger bank threat, bankers expect their organisations to invest heavily in updating legacy systems (44%) and new technology (26%) in 2019.

With investing in new technology high on the agenda for commercial banks, the survey found that over half (53%) of respondents believe AI and Machine Learning will be the technologies to have the biggest impact on commercial banking in 2019.

Atlantic Capital Bank Launches Fintech Partnership with Self Lender (Nasdaq), Rated: A

Atlantic Capital (NASDAQ:ACBI) announces its partnership with Self Lender, a leading Fintech company offering consumers a way to build their credit while saving money. Atlantic Capital provides innovative financial technology companies a banking partner that has significant operational expertise and processing scale to meet the demands of a rapidly growing national client base.  The Self Lender and Atlantic Capital partnership helps efficiently deliver the credit builder account to thousands of consumers across the United States.

Impact of Intelligent Technologies on the Finance Industry (CIO Applications), Rated: A

Source: CIO Applications

Consolidated Analytics Taps Industry Finance Leader Mike Jones as Chief Financial Officer to Facilitate Aggressive Growth and Transformation (PR Newswire), Rated: B

Consolidated Analytics, a one-stop provider of property valuation, asset management, due diligence, fulfillment and advisory services for the real estate finance industry, today announced the appointment of Mike Jones as Chief Financial Officer (CFO). In this role, Jones will be responsible for developing and implementing financial strategies that will support the company’s overarching M&A integration strategy and drive corporate transformation initiatives.

United Kingdom

RateSetter Reported ISA Exceeded Expectation in First Year By Attracting £175 Million of Subscriptions (Crowdfund Insider), Rated: AAA

UK-based peer-to-peer lender RateSetter recently announced its ISA has exceeded expectations in its first year, having attracted £175 million of subscriptions, and currently accounts for one-fifth of the platform’s £830 million funds under management. RateSetter unveiled its ISA in February 2018. It allows investments in peer-to-peer loans to be included in a tax-free ISA wrapper up to an investor’s £20,000 annual ISA allowance.

Zopa’s Latest Report Reveals 1 in 3 Brits in the Dark on Cash ISA Rate (Crowdfund Insider), Rated: AAA

According to Zopa, the research revealed that 1 in 3 British savers (30%) had no idea what interest they’re earning on their Cash ISA and there is a vast difference of knowledge by age with an alarming 42% of people aged between 25 to 44 being in the dark over the rate of interest they were earning on their Cash ISA, in contrast to 21% of over 55s. The research then noted that Generation Z’s were only slightly more aware than Millennials with 39% not knowing their rate of interest.

Is your money safe in an IFISA? (P2P Finance News), Rated: A

THE INNOVATIVE Finance ISA (IFISA) is starting to take off after a slow start – in the last tax year, subscriptions rose more than 700 per cent – but potential investors may still be unsure about the risks involved.

Money put into peer-to-peer loans – with or without the IFISA wrapper – is not covered by the Financial Services Compensation Scheme (FSCS).

Revolut Launches New Business Mobile App (Crowdfund Insider), Rated: A

Digital bank Revolut announced on Tuesday the launch of its new business mobile app. This news comes nearly one year after Revolut debuted its Revolut for Business. Revolut reported that through the mobile app, users may do the following:

  • Track corporate card spending in real-time
  • View card details and PIN on the go
  • Freeze or unfreeze card if it’s misplaced
  • Receive instant spending notifications after every card payment

Should bank-style stress tests for P2P lenders reassure investors? (P2P Finance News), Rated: A

Trade body the Peer-to-Peer Finance Association (P2PFA) requires its platform members to carry out bank-style stress tests on their loan portfolios, but how much confidence should P2P investors  have in these models if  the cycle turns?

P2PFA member Funding Circle has claimed its loanbook would hold up in a recession, after subjecting itself to the toughest Bank of England stress tests. The P2P business lender has said it could still deliver a three to five per cent return to investors in a downturn.

Leasing Foundation to host asset finance technology debates (Verdict), Rated: B

The newly formed Innovation Initiative from the Leasing Foundation is holding a series of breakfast debates this year to explore the asset finance industry’s relationship to technology.

The first event will feature James Alexander, co-founder of P2P lending company Zopa, as keynote speaker and will take place on 13 March from 8am to 10am at Metro Bank in Holborn, London.

Strabane firm funding 55 new homes with £7m from peer-to-peer lender (Belfast Telegraph), Rated: B

The N&R Devine Group is in the process of building the properties, which will go on the market at prices between £105,000 and £189,000.

Twenty of the homes will be built in Cookstown, 25 in Coalisland and the remainder in Sion Mills.

The Strabane-based builder secured the funding for the developments from peer-to-peer lender Assetz Capital.

China

China’s online P2P lending industry is undergoing a massive shake out (technode), Rated: AAA

China’s peer-to-peer (P2P) lending industry is in turmoil. In recent months, authorities have ramped up regulatory oversight of the world’s largest P2P lending industry. Investors are losing confidence at their stakes and pulling their funds, diminishing operators’ liquidity; many of them are facing insolvency.

This week, Chinese police froze RMB 10 billion worth of assets owned by over 380 lenders in a large-scale investigation spanning 16 countries. Dubbed Operation Fox Hunt, the investigation has led to the arrest of 62 suspects implicated in P2P fraud since last June.

The total value of the loans managed by online crowdlenders has fallen to RMB 1 trillion. Prior to the clampdown, in 2015, the total P2P loan amount was RMB 1.25 trillion, according to Chinese media (in Chinese).

Source: wdzj.com

China’s Recession-Proof Economy Heads to a Stress Test (Bloomberg), Rated: A

The reason for the slowdown isn’t clear. Uncertainty over trade with the U.S. — including tariffs, but also export controls and investment restrictions –— could be a factor, especially as other countries show signs of wariness toward Chinese technology companies. Bad investments in real estate and infrastructure could be coming back to bite. A crash in the peer-to-peer lending industry might be contributing.

Source: Bloomberg
European Union

European Marketplace Lender October Surpasses €100 Million in Loan Repayment (Crowdfund Insider), Rated: AAA

October, the European lending marketplace formerly known as Lendix, announced on Wednesday it has surpassed €100 million in loan repayment.

The online lender reported that since its launch more than €250 million has been lent to European companies and nearly 40% of this amount has already been paid into the accounts of both individual and institutional lenders through monthly repayments. October then revealed that the lenders have already supported 570 projects for an average amount of €460,000.

Machine learning: Part of Europe’s consumer loans business (AltFi), Rated: A

Machine learning technologies are widely used to establish consumer credit scores in Europe, a new report confirmed.

Around 70 per cent of financial institutions across the continent say they already use these data technologies to build consumer score cards, which dictate lending, said a survey called, Credit Risk Management 2019 – How Do You Stack Up?

The average coverage rate of non-performing loans in Europe was 46 per cent in 2018, according to the survey.

5 Fashion E-commerce Trends Helping Retailers Build a Cult Following (Klarna), Rated: A

How can you get consumers as psyched about your brand as you are? Get inspired by these five fashion e-commerce trends that are powering more meaningful engagement.
International

UK-based GBG Acquires IDology in $ 300 Million All-Cash Deal (Finovate), Rated: AAA

Identity verification and fraud prevention specialist IDology has been acquired by U.K.-based identity data intelligence firm, GBG, for $300 million (£233 million) in cash.

The deal will give GBG broader reach into the North American market; in a statement, the company said 99% of IDology’s revenues come from the United States.

Are Peer-to-Peer Loans (P2P Loans) the Best Option for a Small Business? (ForexTV), Rated: A

One of the biggest issues that every entrepreneur will have to face at some point is finding financial backing. Money is going to be essential for your business launch, and there are a variety of methods for obtaining that much-needed financial support. One of the most popular solutions is Peer-to-Peer lending (P2P). This is a useful way of getting the money you need without going through the traditional route of obtaining interest only bank loans. Those banks loans can be slow and expensive, so does P2P offer a viable alternative option? Here’s the rundown of everything you need to know about P2P loans.

Australia

Payday loans increase as households pushed into risky credit from non-bank lenders (ABC.net), Rated: AAA

Debt-stressed home owners and renters are increasingly turning to alternative lenders offering so-called “payday” loans and consumer leases, as falling property prices plunge more households into negative equity and banks crack down on credit.

Asia

5 of Vietnam’s Top Funded Fintechs (Fintech News), Rated: AAA

Fintech development is accelerating in Vietnam with companies in the sector attracting US$117 million last year, the maximum funding in Vietnamese startups in 2018. Fintech surpassed e-commerce at US$104 million and other sectors, according to funding data by local accelerator Topica Founder Institute, showcasing the eagerness of investors to take part in Vietnam’s fintech opportunity.

Source: topicafi via Facebook

Tima – US$3M

Founded in 2015, Tima is a consumer financial marketplace and peer-to-peer (P2P) lending platform. The company has signed partnerships with financial institutions, including VietinBank and Nam A Bank, and claims to have disbursed about US$1.7 billion in loans to 2.8 million borrowers and over 30,000 lenders on its platform.

Tima claims to have raised a US$3 million Series B funding round in October at a near US$20 million valuation and recently began the process of raising a Series C investment round after hiring former LendingClub COO John Donovan to its board of directors.

Short Term Loans: For Your Quick Financial Concerns (US Updates), Rated: A

In such a case, availing instant Short Term loans from an online lender may help you in different ways.

No fear of bad credit scores – These loans are available irrespective of credit score status. The Short Term poor credit loans are in possible reach of the bad credit borrowers. You do not have to face rejections due to bad credits.

Authors:

George Popescu
Allen Taylor

The post Thursday February 21 2019, Weekly News Digest appeared first on Lending Times.

Tuesday October 2 2018, Daily News Digest

delinquencies by vintage

News Comments Today’s main news: Renaud Laplache banned from securities industry for 3 years. Varo Money pulls bank charter application. Funding Circle completes IPO. Marcus enters the UK. OnDeck Australia expands equipment finance. Today’s main analysis: Delinquency/Loss Trends, yield curve. Today’s thought-provoking articles: Americans prefer humans over robo-advisors. Global P2P lending market expected to reach $898B by 2024. AltFin’s path to […]

delinquencies by vintage

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

Lending Club founder settles; banks fear weak third quarter (American Banker), Rated: AAA

Renaud Laplanche, the co-founder and former CEO of online lender LendingClub, agreed to pay $200,000 and be banned from the securities industry for three years to settle Securities and Exchange Commission fraud charges. In addition, LendingClub Asset Management (LCAM), an investment management unit of LendingClub, will pay a $4 million fine while Carrie Dolan, the company’s former chief financial officer, will pay $65,000.

LendingClub Responds to DOJ and SEC Settlements (PR Newswire), Rated: A

“We are pleased to have resolution and closure,” said LendingClub Chairman Hans Morris. “Following an internal review in 2016, LendingClub’s Board of Directors accepted the resignation of Renaud Laplanche as Chairman and CEO of the Company. The Board’s decision was not made lightly but the violation of the Company’s business practices, along with a lack of full disclosure by Mr. Laplanche during the review, was unacceptable. The allegations made by the DOJ and the findings of the SEC further support the Board’s decision to take swift and decisive action. We have full confidence in our new management team and we are a better company today.”

Why this fintech pulled its FDIC charter application (American Banker), Rated: AAA

Varo Money is inching closer to having a bank — the next step will require a major leap.

The fintech, which aims to offer consumer banking services with no fees, applied for a national bank charter over a year ago. While it recently received preliminary and conditional approval from the Office of the Comptroller of the Currency, Varo has been unable to secure the blessing of the Federal Deposit Insurance Corp.

Delinquency/Loss Trends; Yield Curve One Hike from Inversion (PeerIQ), Rated: AAA

The range of Fed Funds Rate is now between 2% – 2.25%. A super-majority of committee members indicated that they would like to hike rates by another 25 bps in DecemberUS GDP growth of 4.2% in the 2nd quarter was the fastest since 2014 Q2, and US consumer confidence reached an 18-year high in September.

 

Source: Federal Reserve, Bloomberg, PeerIQ
Source: PeerIQ, Bloomberg

Delinquencies by Vintage

Source: PeerIQ

Bank of America is luring top talent from Apple and Disney to fuel its billion digital ambition (Business Insider), Rated: A

Like its competitors, Bank of America Merrill Lynch is spending a colossal amount of money to stay competitive in the financial tech race: Its $10 billion annual tech budget sits just behind JPMorgan’s $10.8 billion and ahead ofCitigroup’s $8 billion.

A large chunk of that spending goes to the firm’s profit-driving consumer-banking operation, which accounts for $34.5 billion in revenue and $8.2 billion in net income, which is 38% of the firm’s total.

SoftBank Invests $ 400M in Home-Selling Startup Opendoor (Coverager), Rated: A

Online real estate marketplace Opendoor  has announced a $400M investment from the SoftBank Vision Fund, bringing its total funding to date to over $1b. The company also announced it has secured access to more than $2b in debt financing from top banks.

Governor Brown Signs Bill That Expands Access to Capital for the Underbanked (BusinessWire), Rated: A

INSIKT, a CDFI-certified fintech company disrupting the predatory lending industry, today celebrated a major step forward for working families and small businesses in California with the signing of Assembly Bill 237 (AB237), following unanimous approval by the CA Legislature. Sponsored by Lorena Gonzalez Fletcher (D-San Diego), this new law significantly expands access to lower cost loans for Californians who are part of the 66 million underbanked in America ensnared in endless cycles of predatory debt.

AB237 builds on the success of California’s Pilot Program, established in California in 2010 to provide affordable credit for loans below $2,500. The Pilot Program has many consumer protections, including rate caps, mandated underwriting, credit education and reporting of payback information to credit bureaus so that consumers can build their credit score.

The Pilot Program has been working, with the volume of payday lending declining in California by almost 7% from last year, the third consecutive annual decline. AB237 extends all of the Pilot Program’s consumer protections to larger loans of up to $7,500. It also adds new protections, including a 36% maximum debt-to-income ratio, minimum loan terms of one year, and mandatory rate reductions on second and third loans for borrowers in good standing.

Compass Raises $ 400M in Series F Funding (Finsmes), Rated: A

Compass, a NYC-based real estate technology company, raised $400m in Series F financing round.

The round – which will bring the total capital raised to nearly $1.2 billion – was led by the Softbank Vision Fund and Qatar Investment Authority (QIA), with participation from Wellington, IVP and Fidelity.

Americans Prefer Humans over Robos for Financial Advice (Wealth Management), Rated: AAA

Americans are relatively comfortable with automating financial advice but the majority still want a human to consult, according to Charles Schwab’s latest Consumer Digital Demands report.

The report, which surveyed 1,000 U.S. adults this summer, including 391 current robo advisor users, showed Americans are more open to technology performing some tasks than others. For example, 75 percent of respondents said they’re comfortable with more human assistance than automation when it came to performing surgery. They also are overwhelmingly more comfortable with humans over technology when it comes to driving a car (74 percent), diagnosing a major health issue (73 percent) and flying an airplane (66 percent).

Source: Charles Schwab

Read the full report here.

46 percent of millennials think it takes $ 1,000 to start investing—here’s how much you actually need (CNBC), Rated: A

recent survey from financial services app Twine found that 46 percent of millennials believe they need at least $1,000 to start investing. Another 17 percent believe they need at least $10,000 before they’re able to invest.

Overall, 56 percent assume they don’t have enough money to become investors themselves.

It’s simply not true. There are plenty of ways to get into the market with as little as $1, including contributing to an employer-sponsored 401(k) plan, opening a Roth IRA or using a robo-advisor such as Betterment, Wealthsimple or Ellevest, which offer $0 account minimums.

CREDIT WITH A CONSCIENCE (Petal Email), Rated: B

We’re thrilled to announce today that the Petal credit card is now publicly
available on our website at www.petalcard.com.

Meet Klarna (Missy Farren & Associates, Ltd. Email), Rated: B

We’re excited to let you know we are now working with 

Real Estate Mogul And Owner of Flipnerd.com, Mike Hambright, Has Been Published In Forbes (MENAFN), Rated: B

Flipnerd.com continues to grow and make its mark in the real estate world due to the versatility and expertise of its owner, Mike Hambright. In recognition of his expertise, business acumen and dedication to succeeding in his carved niche, the founder of this real estate company has been published on one of the greatest platforms in the world, Forbes.

United Kingdom

Funding Circle Goes Public on the London Stock Exchange (Lend Academy), Rated: AAA

It was a landmark day for fintech in London as Funding Circle became the first UK marketplace lender to complete an IPO.  The company raised £300 million at a valuation of around £1.5 billion. They began trading on the London Stock Exchange (LSE: FCH) this morning with an initial price of 440 pence (at the lower end of the forecasted price range of 420p to 530p). While rising early in the day to 460p it closed the exactly flat at 440p.

Funding Circle valuation ‘reflects brand and growth opportunity’ (P2P Finance News), Rated: A

The peer-to-peer business lender, which listed on the London Stock Exchangeon Friday, was originally targeting a market value of £1.8bn. But after narrowing its IPO price range, it subsequently priced at 440p, implying a market capitalisation of £1.5bn.

Some market commentators argue the company is overvalued as it is still loss-making, although revenues surged from £51m in 2016 to £94.5m last year.

Goldman Sachs Enters U.K. Savings Market, Continuing Consumer Push (WSJ), Rated: AAA

Goldman Sachs Group Inc. entered Britain’s £700 billion ($922 billion) cash savings account market Thursday with the U.K. launch of its consumer bank Marcus, adding a fresh source of funding for the U.S. investment bank.

Online-only Marcus offers savings accounts paying interest of 1.5%, the highest rate for instant-access savings products, according to price-comparison websites.

Zopa customers vote Bond’s Aston Martin as most iconic screen car (P2P Finance News), Rated: A

THE ASTON Martin DB10 driven by Daniel Craig in the James Bond films has been voted the most iconic car in film and television.

The car won 35 per cent of votes in a poll conducted by peer-to-peer platform Zopa.

Inspector Morse’s maroon MK II Jaguar followed in second place with 14 per cent, while Dominic Toretto’s Dodge Charger from The Fast and The Furious came third.

Relendex increases max loan size to £5m (Development Finance Today), Rated: A

Relendex has announced that it has increased its maximum loan size from £3m to £5m.

Loans will also be available on commercial and industrial assets, where circumstances allow, as Relendex plans to reach a lending target of £100m in 2019.

UK in debt: how it looks in figures (London Loves Business), Rated: A

The research briefings provided by the UK Parliament itself show that student debt stands at £105 billion by the end of March 2018.

The Guardian reports that only 5% of the graduates remain unemployed six months after graduating. In addition to that, 74% of professionals who enter the workforce are full-time first degree graduates. In terms of the pay that they get, males more than females tend to benefit from getting a degree. The men’s average pay rise to £24000.

The Guardian reports that by the end of July 2017, unsecured credit had risen to a level not seen since September 2010. Specifically, unsecured debt has reached £201.5 billion.

70% believe low credit scores or zero hour contracts would prevent borrowing (Financial Reporter), Rated: A

Just 31.6% of the 2,400 respondents recognised that none of the reasons listed automatically prevent someone from getting a mortgage.

A massive 47.5% believed a low credit score could stop someone getting a mortgage, 33.4% thought a zero hour contract would be a barrier and 15.6% said a payday loan would stop an application from being accepted.

Fintech iwoca responds to £775m RBS competition package briefing (iwoca Email), Rated: B

The CEO of one of Europe’s fastest growing business lenders has a cautiously optimistic outlook for the £775 million RBS Alternative Remedies Package following a briefing by Banking Competition Remedies this morning.

“Funds from Pools C and D of the package’s Capability and Innovation Fund, would enable iwoca to bring innovative new technology to the market, making it easier for small businesses to secure finance on their terms, whenever and wherever they need it. What’s more, we would be that much closer to achieving our target of funding 100,000 small and micro businesses in the next five years.”

China

China Rapid Finance Announces Submission of Regulatory Report and Board Change (Markets Insider), Rated: AAA

China Rapid Finance Limited (the “Company” or “XRF”) (NYSE: XRF), operator of one of China’s largest consumer lending marketplaces, today announced that it submitted its P2P Compliance Self-Inspection Report (the “Report”) to its local P2P regulatory office. The Report is the first of three steps mandated in the inspection process, a key element in demonstrating compliance with industry reforms being promulgated by the National P2P Rectification Office.

Golden Bull Reports 75% Revenue Rise for First Half; Up 6% on Wall Street (Capital Watch), Rated: A

The stock of Golden Bull Ltd. (Nasdaq: DNJR) rose more than 6 percent by Monday afternoon after the Chinese P2P lending company posted a 75 percent increase in revenue for the first half of 2018.

Revenue jumped to $4.9 million compared with $2.8 million during the first six months of 2017, the Shanghai-based company said, thanks to an increase in borrowers. According to its statement, Golden Bull has facilitated 3,000 loans with total volume of $77.8 million during the first half compared with 2,200 loans in the amount of $53.7 million processed a year ago.

Chinese Household-Debt Levels Reach Record High (The Epoch Times), Rated: A

While its overall household wealth has increased, China’s household debt-to-GDP ratio reached a record high of 49.1 percent in 2017, according to a new report on global wealth by German insurance giant Allianz. Since the beginning of 2008 to the end of last year, Chinese household debt jumped an average of 27 percent annually, according to separate but corroborating data from the Bank of International Settlements.

Samoyed Holding Files For $ 80 Million U.S. IPO (Seeking Alpha), Rated: A

Samoyed Holding (SMY) intends to raise gross proceeds of $80 million from a U.S. IPO, according to an F-1 registration statement.

The firm provides technology-driven credit services to credit-proven millennials in China.

SMY is growing revenues and weighted-average APR but is also seeing sharply increased charge-off rates for its credit card balance transfer marketplace.

European Union

Younited Credit expands to Portugal (AltFi), Rated: A

The Paris-based consumer lending platform Younited Credit has increased its potential customer base by launching in Portugal, its sixth European market. Already distributing loans in Germany and Austria, it has 35 per cent of its loans in Italy and Spain.

Telia Sweden overhauls organisational structure, brings in Klarna customer service head on 01 January (Telecompaper), Rated: B

Johan Andersson will lead the strategy division, Fredrik Sidmar will be in charge of professional services, Piero Trivellato will be responsible for digital and analytics, and Sandra Alenius will lead customer service delivery. Alenius will join Telia from Swedish payments specialist Klarna.

International

Global peer-to-peer lending market set to reach $ 898bn by 2024 (P2P Finance News), Rated: AAA

THE GLOBAL peer-to-peer lending market will grow to $898bn (£688bn) by 2024, according to new research.

The report predicted that this will allow the P2P market to achieve a compound annual growth rate of 48.2 per cent over the next eight years.

AltFin’s Inconsistent Path To SMB Adoption (PYMNTS), Rated: AAA

In the U.K., $248.9 million was lent to SMBs via alternative lending platforms in Q2, according to the U.K. Peer-to-Peer Finance Association (P2PFA). The P2PFA highlighted that the statistic means net lending to SMBs, via member alternative lending players, surpassed that of high-street banks, which lent about $169.4 million to SMBs during the year’s second quarter. New lending to small firms, among member marketplace lending portals, increased by nearly $130.3 million, the association noted.

In the U.K., 30 percent of small firms need external financing simply to survive, according to new Liberis data.

In the U.S., 63 percent of SMBs sought a loan for working capital needs last year, including payroll, inventory and supplies, according to new data from S&B Global Market Intelligence.

In Mexico, 44 percent of small businesses that have been in operation for five years haven’t seen their incomes rise, according to Moody‘s Senior Credit Officer Felipe Carvallo in an interview with Euromoney. According to Moody’s data, small businesses accounted for just 9.1 percent of all loans in Mexico as of last March — equivalent to only 2 percent of total GDP, reports said.

Skynet Controversy: Similarly Named Tezos dApp Promises Enhanced Peer-to-Peer Lending (BTC Manager), Rated: A

Skynet Open Network seems to promise all things to all people – fastest blockchain implementation, AI on Blockchain, Healthcare on Blockchain and more. Some of the 17,000 people on the SkynetOpen telegram channel were understandably furious about the similarities in the name when Skynet World announced their project on September 26, 2018.

According to the Skynet World whitepaper, they are the first DAPP on the Tezosblockchain.

Skynet World aims to disrupt the bank lending space by offering peer to peer lending through their app. According to Skynet World:

“Banks are the major source of debt finance for both households and businesses, accounting for about three-quarters and two-thirds respectively of all debt finance provided to those sectors… Banks charge most of the interest up front, a practice known as amortization. Through amortization, 70% of the total interest is paid by the halfway point of the mortgage period.”

Australia

SME lender expands equipment finance (AustralianBroker), Rated: AAA

An online lender has expanded its offering of equipment finance, saying it is providing a solution for the “underserved” market of small business owners.

OnDeck Capital Australia said it had received feedback from small businesses and brokers about the length of the loans.

India

MODI OPERANDI (All About Alpha), Rated: A

What’s your liquidity M.O.? If you are less than certain, it is time to look east toward the country of India and the land of Modi. After all, when 1.3 billion people cough there is a decent chance the rest of the world just might get sick, or maybe just sick of being gated, PIK-ed, or having their holdings marked down 10% or more in a single trading session.

In September an unlisted India company that relied on debt funding for various infrastructure projects defaulted and the spillover into the listed equity markets was contagious and quick. The poster child this time around was Dewan Housing Finance Corp. Their commercial paper, which was issued to fund their longer term capital needs, ticked up 50 basis points when a mutual fund went to liquidate some of that holding, and the stock ended up dropping by more than half in a single trading session. Despite management claims of good health and solid liquidity, many investors could not process or hear it as they ran from the fire. Some other names in this sector suffered similar fates, and the damages (or buying opportunities) are still being sorted out. In India, the publicly traded mutual funds are estimated to own 60% of the commercial paper issued by these non-bank finance companies.

Uttam Prakash Agarwal joins PaisaDukan as independent director (Business Standard), Rated: B

Former Uttam Prakash Agarwal has joined NBFC-lending major as 

APAC

Belt Road Capital invests $ 3m in Vietnamese P2P lending startup Tima (Deal Street Asia), Rated: AAA

Mekong-focused venture capital firm Belt Road Capital Management (BRCM) has injected $3 million in a Series B funding round of Tima, a Vietnamese P2P lending platform incepted in 2015.

The latest investment values the company at $20 million. Tima raised a series A round in 2016 from Dunearn Singapore Fund and G Capital.

First Circle, a Philippine-based Fintech, Preps to Launch New SME Targeted Credit Facility with Support of Government (Crowdfund Insider), Rated: A

First Circle, a Philippine Fintech, is expected to announce a new credit facility for SMEs nationwide. This new facility has gained the support of the Philippine Department of Trade and Industry (DTI) and the Bangko Sentral ng Pilipinas (BSP).

First Circle is an online lender that provides supply chain financing to SMEs.

Authors:

George Popescu
Allen Taylor

Wednesday March 14 2018, Daily News Digest

equity factor returns

News Comments Today’s main news: H&R Block, LendingTree partner on credit score access. KBRA assigns preliminary ratings to LendingClub’s CLUB Credit Trust 2018-NP1. Ant Financial consumer lending hits $95B. Non-Standard Finance buys guarantor loans business. EU rolls out new crowdfunding rules. Today’s main analysis: LendingTree’s mortgage savings tracker, mortgage rate competition index. Does strong economic growth equate to high factor […]

equity factor returns

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Asia

News Summary

United States

H&R Block, LendingTree partner to empower clients to improve their financial well-being (Nasdaq), Rated: AAA

As part of continued efforts to help clients better understand their financial situation, H&R Block (NYSE:HRB) is partnering with LendingTree (NASDAQ:TREE) to provide clients convenient access to their credit score, LendingTree Academy and more. H&R Block clients can now seamlessly enter LendingTree via their MyBlockaccount, which is a private, secure, online portal clients can use year-round to access and add tax documents and personal information.

LendingTree Introduces New Mortgage Savings Tracker and Mortgage Rate Competition Index (PRNewswire), Rated AAA

LendingTree today announced the release of its Mortgage Savings Tracker and Mortgage Rate Competition Index. The LendingTree Mortgage Rate Competition Index is a new measure of the dispersion in mortgage pricing and will be released weekly. Built on top of the Mortgage Rate Competition Index, the Mortgage Savings Tracker will bring a new transparency to mortgage shopping by highlighting the significant savings that are available to potential borrowers for both purchase mortgages and refinancing.

Source: PRNewsfoto/LendingTree

 

Source: PRNewsfoto/LendingTree

Findings from the inaugural report:

  • Across all purchase loan requests on LendingTree (we looked at refinance loan requests separately) in 2017, we found an average Mortgage Rate Competition Index of 0.46 — this was the average spread between the lowest and highest APR offered by lenders.
  • It may not sound like much, but over 30 years translates to $21,000 in additional costs on a $300,000 loan.
  • The index was wider in the refinance market, averaging 0.55. Potential borrowers there could have saved an average of $26,000 had they shopped around to find the lowest rate.
  • Ringing in the new year, the index widened to 0.59 for potential purchase borrowers, translating to a potential savings of just over $27,000.
  • For potential refinance borrowers, again, the index was even higher at 0.63. That could result in a savings of almost $30,000. The savings increased because lenders are reacting differently to the overall uptick in rates.
  • The most recent data for the week ending 3/11/2018 showed potential savings of $26,780 for purchase and $27,616for refinancing.

See LendingTree white paper on the Mortgage Rate Competition Index here.

KBRA Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-NP1 (Business Wire), Rated AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-NP1 (“CLUB 2018-NP1”). This is a $301.727 million consumer loan ABS transaction that is expected to close March 21, 2018.

Source Business Wire

LendingClub trims CE on next near-prime consumer loan ABS (Asset Securitization Report) Rated: AAA

As in the past, LendingClub itself contributed only a small portion (7.55%) of the collateral for the Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-NP1 transaction from loans it held on balance sheet, but this time only three unaffiliated parties were invited to contribute the remainder of the collateral.

source American Banker

CLUB 2018-NP1 will issue three classes of notes totaling $301.727 million. Credit enhancement for the senior $180.7 million tranche of Class A notes is 49.5%, down 30 basis points from the senior tranche of the previous transaction, which carried the same A-rating. However, enhancement for the BBB-rated Class B tranche has risen by 5 basis points to 37.4% and enhancement for the BB-rated Class C tranche has risen by 35 basis points to 15.35%, per Kroll.

DOES STRONG ECONOMIC GROWTH EQUATE TO HIGH FACTOR RETURNS? (All About Alpha), Rated: AAA

In this research report we initially focus on the Value, Size and Momentum factors from Fama-French, which are constructed as dollar-neutral long-short portfolios based on the top and bottom 10% of the US stock market. The data includes companies with small market capitalisations, excludes transaction costs and is available since 1926. We expand the factor set by the Low Volatility, Quality, Growth and Dividend Yield factors based on our own data, which is available since 2000. These are created via long-short beta-neutral portfolios and only include stocks with a market capitalisation of larger than $1 billion. Portfolios are rebalanced monthly and each transaction occurs costs of 10 basis points.

EQUITY FACTORS & REAL GDP GROWTH: 1947 – 2017

The chart below shows the returns of the S&P 500 and three factors (long-short) since 1947 sorted by positive and negative quarters of real GDP growth.

It’s worth highlighting that there were only 7 quarters of negative real GDP growth since 2000, so the results have to be taken with caution.

DIVERSIFICATION FOR AN EQUITY-CENTRIC PORTFOLIO

New Media Announces Strategic Alliance with Kabbage (BusinessWire), Rated: B

New Media Investment Group Inc. (“New Media” or the “Company”, NYSE: NEWM), one of the largest publishers of locally based print and online media in the United States as measured by number of publications, announced today that it has entered into an agreement with Kabbage, a pioneering financial services, technology and data platform serving small businesses. This alliance is intended to bring awareness of simple access to working capital through Kabbage’s fully automated online lending platform to more than five million small and medium sized businesses (SMBs) that do business in New Media’s markets.

AI as new tool in banks’ crime-fighting bag? (American Banker), Rated: A

But a funny thing has happened on the way to what should be an AI-led revolution — banks have been worrying what their regulators would say if they filed fewer suspicious activity reports, especially if their rivals continue to submit far more.

source: American Banker

“All the banks are worried that if they use machine learning, the number of SAR filings will go way down and the regulators will say, what happened?” Saleh said. “How come your SAR filings fell by 50%? Maybe there’s money laundering you’re not catching.”

Should Banks Become the New ‘Payday’ Lenders? (LendEDU), Rated: A

In early March, the Florida state legislature approved revamping regulations for payday loans, voting to allow payday lenders to make larger loans for a longer period of time.

The bill aims to allow alternative lenders to make installment-type loans up to $1,000, with a 60- to 90-day repayment period. The current law caps loans at $500 for a period of seven to 31 days.

The Pew Charitable Trusts’ proposal suggested that small banks could instead provide loans with payments capped at 5 percent of a borrower’s paycheck.

According to The Pew Charitable Trusts’ research, the average payday loan customer borrows $375 over five months and pays $520 in fees, while banks and credit unions could profitably offer the same amount over the same period for less than $100.

Bank regulators vow more flexibility in vetting fintech partnerships (American Banker), Rated: B

Senior leaders at the Federal Reserve, the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau, who all spoke at a banking conference in Orlando, Fla., said they have been working with examiners to be more understanding of the budding partnerships forming between banks and fintech firms — and how to examine those relationships going forward.

Clinc wants to solve financial institutions’ AI problems (Business Insider), Rated A

Clinc, a US-based provider of conversational AI technology for financial institutions (FIs),announced the launch of a new self-service platform, Spotlight, that enables FIs to train and deploy sophisticated conversational AI software in-house, independently of vendors.

source: Business Insider

Spotlight is available in over 80 languages, and can be integrated into any digital channel, including contact centers, mobile apps, and Alexa, Google, and Facebook Messenger, allowing FIs to create a consistent user experience. Spotlight is already being used by USAA and Isbank, one of Turkey’s largest banks.

MoneyLion Plus Takes An Innovative Approach to Encourage New Investors to Save (Lend Academy), Rated: A

As a nation we are chronically bad at saving and while the savings rate went up for a time after the financial crisis it is back down near 2005 levels now which was the all time low.

MoneyLion is trying to do something about this.

I interviewed CEO Dee Choubey on the Lend Academy Podcast just over a year ago but they have made some great strides since then. I caught up with him again recently to get an update. Today, over 2.2 million people have downloaded the MoneyLion app and 1.3 million people have connected their bank account.

Behavioral biometrics company BioCatch closes $ 30M round (Bankless Times), Rated: A

Behavioral biometrics provider BioCatch today announced it has closed a $30 million financing round led by Maverick Ventures with additional participation from American Express Ventures, NexStar Partners, Kreos Capital, CreditEase, OurCrowd, JANVEST Capital and other existing investors.

What Makes Warren Buffett Such an Influential Leader? (Industry Leaders), Rated: A

A data scientist at Orchard Platform, Michael Toth, who has also worked with BlackRock as portfolio analyst has evaluated Buffett’s shareholder letters annually at Berkshire Hathaway for personal growth as a sole investor. Using statistical computing, Toth quantified and highlighted Buffett’s positivity penchant for many years according to CBNC.
And results from the analysis revealed that Buffett has the ability to balance both realism and optimism. The dataset also taught Toth about the reasons why Buffett is a legendary investor and as well as an influential leader.
Only five of the forty shareholder letters analyzed showed a negative score of sentiment, and most interestingly, they all correspond perfectly to five periods of downturn in the economy.

What’s next for neobank Chime (Bankrate), Rated: B

Since its 2014 launch, the San Francisco-based startup has emerged as one of the leaders in the so-called neobank space. Earlier this year, it announced it has 750,000 accounts opened to date, and is now adding new accounts at a rate of 100,000 a month.

How Fintech Advances Are Creating New Opportunities for Micro-Businesses (NewsTimes), Rated: B

Those solutions benefit business owners, ranging from freelancers, to founders of startups, to leaders of burgeoning small businesses and other enterprises.

Lending is one of the most critical areas where fintech has filled a gap for small businesses. As smaller businesses often don’t need a considerable amount of money when they seek loans, they’ve struggled to get any financial assistance. That’s because banks and other lending institutions often don’t see any profit in providing loans of less than $100,000.

United Kingdom

 

Former RateSetter-backed lender ‘transforms’ new owner’s guarantor loans business (Peer2Peer Finance), Rated: AAA

Non-Standard Finance bought the guarantor loan provider last August for £53.5m, which included a minority stake owned by RateSetter.

The London-listed firm said on Tuesday that the acquisition has “transformed” its guarantor loans business, helping that division’s loan book to grow by 35 per cent. It said the acquisition contributed to the group’s overall operating profit rising 497 per cent to £2.7m in its latest annual results.

Tandem Bank to buy Pariti in UK fintech tie-up (Financial Times), Rated: A

Digital bank Tandem has agreed to buy fellow British fintech group Pariti, as it looks to head off rising competition from established lenders taking advantage of new legislation that gives them greater access to customer data.

New rules that came into force in January allow companies such as Tandem and Pariti to access customer data from other lenders if the individuals give consent.

AltFi London Summit Preps for Event this Month as UK Alternative Finance Continues to Grow (Crowdfund Insider), Rated: A

The 5th Annual London Summit is scheduled to take place on March 26th during a time of significant change in the UK. Brexit jitters along with dramatic regulatory changes such as Open Banking and PSD2 has created a varied and dynamic environment. Yet alternative finance continues to grow with AltFi estimating that UK loan origination volumes increased by 41.9% to £14.1 billion in 2017. During 2018, this number is predicted to jump by £7 billion.

Speakers already confirmed include Samir Desai, CEO and co-founder of Funding Circle, Ricky Knox, CEO and co-founder of Tandem and Anne Boden, CEO and founder of Starling Bank.

 

Eight luxurious Holywood homes get £3m in funding from peer-to-peer lending firm (Belfast Telegraph), Rated: B

Eight luxury homes being built in the hills of Holywood have received £3m in peer-to-peer (P2P) funding.

Cobain Group, which is behind The Twisel Brae development, received the funding from lender Assetz Capital.

The eight detached properties, styled by designer Kris Turnbull, will range from 2,200 to 4,000 sq ft in size, and cost between £575,000 and £800,000.

China

Ant Financial Consumer Lending Reaches $ 95 Billion (Bloomberg), Rated: AAA

From the start of 2017 until this month, Ant’s consumer lending has doubled via its Huabei and Jiebei units even as the government reduces quotas for new asset-backed securities that can underpin such loans, one of the people said, asking not to be named as the matter is private. The loans can incur annual interest rates as high as 15 percent, although they are normally less than that, another person said.

Controlled by Alibaba Chairman Jack Ma, Ant has become a financial giant that was said to be valued at $60 billion and currently has more outstanding consumer loans than China’s second-biggest bank.

China’s Financial Disintermediation And M2 (Trade Captain), Rated: A

The past few weeks have been deluged with important events in Asia, but we don’t want the data to be washed away in the flood. In particular, note that China’s liquidity conditions continue to tighten, pointing to a further slowdown in nominal GDP growth over the next two years. Granted, M2 growth bounced back in February, and should edge higher in coming months, due to favourable base effects. But it remains historically low. Moreover, growth in our broader gauge of liquidity likely will continue to slow.

WeChat: the real Beast from the East (The Finanser), Rated: A

 

Mobile payments is another area where Tencent is thriving. WeChat Pay, a mobile payment system integrated into the app, holds 40% of China’s whopping US$12.77 trillion mobile payment market. Kickstarted by China’s virtual red packets exchange that supplanted the tradition of giving monetary gifts during Chinese New Year, WeChat Pay has seen impressive growth since its launch in 2013. Its monthly offline commercial transactions jumped 280% year over year in 2017 while social payment transactions grew 23%. Along with Alibaba’s Alipay, the service is making cash and plastic obsolete in China.

European Union

New rules put forward to help crowdfunding platforms grow across EU (Bridging & Commercial), Rated: AAA

These proposals – which are part of the European Commission’s fintech action plan – will enable crowdfunding platforms to offer their services EU-wide and improve access to this form of finance for start-ups and SMEs.

At present, it is difficult for many crowdfunding platforms to expand into other EU countries, but once these proposals have been adopted by the European Parliament and the Council, the proposed regulation will allow platforms to apply for an EU label based on a single set of rules.

Future Finance Closes €40 million Investment Round (PR Newswire), Rated: A

  • Future Finance completed €40 million Series C round with existing investors.
  • Investors remain excited about Future Finance’s ability to disrupt the UK student lending market.
  • Equity injected will be used to fund loans and hire top talent in LondonDublin and Chicago.

Start-up to stardom, Bondora turns 10 years old (Bondora) Rated: B

In the height of the global financial crisis, Bondora was officially founded on 11.03.2008. While it may have seemed counter-intuitive to most to create a new financial platform at this time, there was a clear need to serve customers who had been failed by the banks and disrupt the wider financial ecosystem.

International

Higher yields driving marketplace lending uptake among institutions, finds study (AltFiNews), Rated: AAA

According to a new study, marketplace lending is here to stay. That’s among the major findings of the Greenwich Marketplace Lending research study, conducted August to October 2017. It is based on the fact that 52 per cent of institutions currently investing in the asset class believe that marketplace lending will be a significant part of the financial system in the next 10 years.

Greenwich Associates interviewed 74 investors from pension planners to asset managers to compile its results. These investors control more than $3.5 trillion in assets between them. When the research was conducted, 21 of the firms were investors in marketplace loans, while 53 were not.

Of those investing in the asset class, 67 per cent cited higher yield as their primary reason for investing. Diversification and low correlation (48 per cent), access to consumer or small business credit (43 per cent) and low volatility (33 per cent) were also cited as important drivers.

Australia

 

Why Smart Aussies Are Dumping Banks for Online Loans (Mozo), Rated: B

Everything is online these days – including some of the best value home loans around. In fact, Mozo has taken a look at our database, and found that 1 in 2 home loans with a rate under 4% are offered by online lenders.

And when we crunched the numbers, we found that by switching from the average big four bank variable rate to the best deal around from an online lender, a typical borrower with a $300,000 home loan could save as much as $2,596** every year!

Square Peg In $ 200m Round Hole (Channel News), Rated: A

Paul Bassat’s venture capital outfit Square Peg Capital is said to be looking to raise more than $200 million as it seeks to add more investments to its portfolio interests in graphic design group Canva and online lender Prospa. Melbourne-based Square Peg, which was backed in its early days by billionaire James Packer, invests across Australia, Israel and South-East Asia.

India

Faircent.com bolsters its leadership ranks with two key appointments (India Times), Rated: AAA

P2P lending major, Faircent.com on Wednesday said it is strengthening its leadership team with industry veterans Vikas Prasad and Mayank Bishnoi coming on board. Prasad has joined the company as Head – Planning, Processes & Control, while Bishnoi has taken over as Head – Customer Experience.

“As the largest player in the rapidly-growing P2P lending industry, Faircent.com is currently at a critical juncture of its growth journey. More and more Indians from across multiple geographies are associating with our platform, both as lenders and as borrowers,” said Rajat Gandhi, Founder & CEO – Faicent.com in a statement.

Regulations for fintech companies in India: A dire need (Qrius) Rated: A

FinTech small business lending is currently developing with promising potential to complement and emerge as a healthy alternative to brick and mortar banking. The number of small businesses turning to FinTechs or non-traditional lenders has exploded over the past couple of years with many economies reporting a sharp increase in the number of small businesses turning to marketplace lenders in 2017. Marketplace lending accounts for 0.08% of the $96 trillion global corporate and household outstanding debt. Growing at an average 123% a year since 2010, Morgan Stanley forecasts that it will reach $290 billion by 2020.

FinTech lenders are forced to pay a commission to introducers or brokers which goes up to 4% of the loan amount which is normally passed on to clients.

Asia

Grab to offer loans, insurance with new fintech platform Grab Financial (The Straits Times), Rated: AAA

Grab will now offer loans and insurance with its new fintech platform – Grab Financial – the ride-hailing company announced on Tuesday (March 13).

This new platform will encompass all of Grab’s fintech offerings, including payment services, rewards and loyalty services, and financial services, among others.

To provide loans to consumers, micro-entrepreneurs and small businessess across South-east Asia, Grab has embarked on a joint venture (JV) agreement with Credit Saison Co, one of Japan’s largest consumer financing companies.

Initial offerings include accident, hospitalisation and other critical insurance coverage to Grab’s 2.6 million drivers, accessible through the Grab driver app.

FintruX advisor Yash Mody explains the platform’s future plans (Finder), Rated: A

Basically, FintruX is building a truly global peer-to-peer lending platform, and it’s secure, it’s fast, it’s easy. Lenders and borrowers don’t have to worry because the platform does all the work for them. They basically set their criteria and then they don’t have to think about it. They don’t have to auction and they don’t, you know, it’s not a cumbersome process. So that’s why we think it’s a new way of doing business.

And obviously, there’s a lot of regulation in this area. So how scalable is it? Are you going to run into lots of different regulatory issues with, issues lending loans between countries?

Yeah, so we’ve taken great care to make sure that we’re within regulation. We have four lawyers on board and advisers and all that, and we’re very cognisant of what’s required. As a first stage, we’re not going to be doing cross-border lending. So let’s say, for example, we’re going to launch in Singapore and Canada, so it would be a loan that’s in Canada from a lender and a borrower in Canada.

Indonesia eyes fintech regulation to avoid ‘loan shark-like’ practices (Reuters), Rated: A

Indonesia’s financial regulator said it was considering setting a cap on interest rates and the size of loans offered by fintech firms, in a move aimed at minimizing the risk of defaults.

The emergence of these peer-to-peer (P2P) lending platforms, offering loans ranging from as little as a few hundred dollars to several thousands, has so far been welcomed by Indonesia, Southeast Asia’s biggest economy where tens of millions of people have little or no access to bank credit.

More than 300,000 people have borrowed from these firms, with total loan distribution reaching 3 trillion rupiah ($218 million) as of January, versus 247 billion in December 2016, according to data from the Financial Services Authority (OJK).

Venture financing investments in the software segment receiving highest attention in Japanese enterprise market (Global Data) Rated : A

In 2017, venture financing (VF) investments in the software segment constituted 46% of the total deal value in the Japanese enterprise market, according to GlobalData, a leading data and analytics company. On the other hand, 38% of the total number of VF deals in the country was in the software segment.

source Global Data

VF investments in the IT service segment constitute 38% of the total deal value in 2017. The IT service segment investments are primarily focused on consumer facing enterprises, such as online lending, social networking, online media publishing, e-commerce, and online dating, among others. As Japanese technological advancements are on the forefront of global market, VF companies are investing in Japanese technology enterprises in order to expand their operations and achieve business growth.

New Business Models, Emerging Tech Enabling FinTech Companies to Improve Financial Inclusion (PRNewswire), Rated: A

FinTech companies are making significant progress in promoting financial inclusion through innovative business models, products and increased use of emerging technologies such as digital identity, Internet of Things (IoT), Artificial Intelligence (AI) and machine learning, says a new report co-authored by CreditEase, IFC, a sister organization of the World Bank and member of the World Bank Group, and Stanford Graduate School of Business. The report, “Financial Inclusion in the Digital Age,” was launched today during Money20/20 Asia in Singapore.

Over two billion unbanked adults in the world, representing 38 percent of all adults globally, do not have access to basic financial services and another 57 percent have basic accounts but do not have access to a full range of services that include diversified savings and investments, low-cost payments systems, insurance, or credit.

Peer to Peer lending increasingly popular in Vietnam (VietNamNet), Rated: A

In 2012, P2P outstanding loans worldwide totalled $1.2 billion, while the figure rose to $64 billion in 2015 and is expected to reach $1 trillion by 2025.

A big advantage of the P2P model is the high information security level based on BigData technology which encrypts, stores and controls customers’ information.

Analysts said with the advantages of the model, plus current conditions in Vietnam, P2P could replace black credit, or lending at very high interest rates, which is illegal in Vietnam.

According to the World Bank, 79 percent of the population in Vietnam cannot access official financial services.

Vietnamese P2P lending startup Tima seeks to close Series B round by June (Deal Street Asia), Rated: B

Tima claims to be the first P2P lending startup in Vietnam. Launched in 2015, the platform has seen cumulative money from its lender partners reach over $900 million. In 2016, Tima closed a seven-digit US dollar Series A funding from an undisclosed Singapore fund to accelerate its growth in the local market.

Authors:

George Popescu
Allen Taylor

Monday December 19th 2016, Daily News Digest

Monday December 19th 2016, Daily News Digest

News Comments Today’s main news: Lending Club CTO resigns. Higher financing cost expected to be pushed to the borrower. Zopa lifts investment limits. Nigeria fintech startup Paystack raises $1.3M in seed money. Today’s main analysis: Novel underwriting criteria by SoFi in RMBS leads to a strong rating. Statistics of lending between friends and in families. Today’s thought-provoking articles: The rise […]

Monday December 19th 2016, Daily News Digest

News Comments

United States

United Kingdom

  • Zopa lifts investment limits. GP:” I didn’t expect this to last long. It did get Zopa some nice press. And I am glad it didnt’ last long. If it had lasted too long it would have been a bad sign.”AT: “That didn’t last long.”
  • Growth Street’s Sherwin-Smith says 34M GBP has been originated to date.
  • 25% fall out with friends over loans. GP:” Very interesting statistic : 1/4 or so of friends have a fall out over money.  And 3/4 of UK people polled lent money in the last 12 months and 4% lent more then 5,000 GBP. Inside friends and family loans estimated to 2.9bil GBP per year.”

European Union

Australia

India

Asia

Africa

  • Paystack raises $1.3M. GP:” We are pleased to cover the whole world and to see p2p lending and fintech growing everywhere.”

International

News Summary

 

United States

PeerIQ Weekly Industry Update (PeerIQ Email), Rated: AAA

In a widely expected move, FOMC officials increased the Fed Funds rate by 25 bps to a target range of between 50 and 75 bps. Higher financing costs on warehouse lines will reduce net interest margins for whole loan investors unless there is a commensurate rate increase for borrowers. Platforms are expected to pass on some or all of the increase in borrowing costs to consumers to demonstrate the resiliency of the business model to small changes in interest rates.

Much like the beginning of 2016, Fed officials expect several rate increases in the new year as the economy approaches full employment. However, we note that over the life of the current expansion officials have consistently over-estimated the pace of GDP growth and inflation and therefore the pace of rate increases has been slower than expectations.

We highlight two important benefits from issuer’s perspective for QM designation. Issuers are 1) insulated from claims and defenses by borrowers due to safe harbor, and 2) are not required to retain 5% of capital structure per the credit risk retention rule. Nevertheless, SoFi intends to retain risk in the transaction.

Collateral Quality of SFPMT 2016-1 is One of the Strongest in 2016

Unlike traditional RMBS underwriters, SoFi incorporates additional criteria such as Free Cash Flow (FCF) and Real Excess Cash Flow (REC) into its underwriting process. REC measures a minimum residual income after payment of housing expenses, taxes, debt obligations, and estimated discretionary and cost of living expenses based on the borrower’s location. SoFi assesses the borrowers’ liquidity position to ensure that they have consistent cash excess including their mortgage payments.

Besides this novel underwriting criteria, SFPMT 2016-1 also has a number of strong collateral characteristics that mitigates potential credit risk. For instance, its collateral pool has one of the lowest weighted average loan-to-value (LTV) and debt-to-income (DTI) ratios amongst recent prime jumbo deals.

Fed Fund Rate Hike led to Wider Pricing for SFPMT 2016-1

The Federal Reserve on Wednesday sent its key short-term interest rate up by a quarter of a percentage point. FNMA 30yr conventional loan pool with 3.0% coupon trades around at 3.3% yield today vs 2.6% yield a month ago. Due to the recent interest rate hike and other factors, SFPMT 2016-1 was priced wider than other recent comparable transactions. For instance, the Sequoia deal SEMT 2016-3 was priced over 100 basis points tighter over a month ago due to changes in the rate environment and other factors.

Orchard Weekly Online Lending Snapshot (Orchard Platform), Rated: AAA

Many banks were quick to announce an increase in their prime lending rates, and while we expect that some online lenders will follow suit, as of this writing we have not seen similar announcements. While 2016 has been a turbulent yearfor some online lenders, we expect the acceleration in positive deals and increased interest from traditional lenders looking to participate in the space will continue into 2017.

Why Lenders Should Embrace Alternative Credit Scores (National Mortgage News), Rated: AAA

It may take time and regulatory easing for depositories to emulate organizations like SoFi in transitioning to a “FICO-free” credit scoring model, but there is definite merit in leveraging alternative models to tap into a significantly underserved (yet creditworthy) segment of the population. Developing an alternative credit score or leveraging existing models enables a lender to penetrate this overlooked market and gain new consumers at a time of increased competition and reduced profit margins.

An Experian study estimated that 64 million consumers in the United States do not have a FICO credit score. Further, Vantagescore assessed 10 million of these so-called “unscoreable” consumers as prime or near-prime consumers, while another significant percentage have steady jobs and/or low liability levels. Clearly, there is a need to determine creditworthiness outside of the traditional models.

The traditional underwriting process can also be enhanced by leveraging nonconventional variables such as credit card transactions, social media presence and utility bills. This can potentially reduce credit risk through expanded risk modeling and monitoring. Lenders should consider back testing alternative scoring models as a challenger to compare against the FICO model in a champion-challenger sandbox environment.

Alternative credit scoring presents tremendous opportunities, but it is not without risks and challenges.

THE RISE OF INSURTECH IN THE AGE OF ALGORITHMS (Data Economy), Rated: AAA

As in banking, peer-to-peer is hot in insurance with older players like Friendsurance and also newcomers such as Lemonade, InsPeer, InSured, and Teambrella. Each promises insurance that is more transparent and social with shared costs – things that have wide appeal in today’s market where customization is king.

Another interesting area in insurtech is item-specific, event-specific, and on-demand coverage – “smart insurance.” Startups in this space collect data about a customer’s possessions and provide machine-learning enhanced risk pricing for single-item coverage of any duration. This model allows premium levels to scale down to pennies with durations down to the second for completely customized coverage.

Of course, even when insurance companies partner with IoT manufacturers, the question still remains: who owns the customer relationship? For complete control of the customer experience and customer proximity, it’s essential that today’s insurance companies embrace the age of algorithms and better leverage IoT technology and big data to drive innovation.

Insurance can’t continue to simply partner with IoT manufacturers for long – they have to lead the movement. This means appropriating the very tools giving their new competitors an advantage in both IoT and non-IoT spheres: big data and algorithms. By leveraging IoT technology to gather more data about customers’ homes, cars, and even the people themselves, insurance companies can then better use real-time data, predictive modeling, and machine learning to create new business models and new offerings for clients.

Current startups in the space are proving that the age of algorithms is a positive development for the insurance business itself and for its customers, who are looking for more options, flexibility, and transparency, all of which IoT and big data analysis can offer.

Fitch Expects to Rate SoFi Inaugural Residential Mortgage Backed Securities (Crowdfund Insider), Rated: A

Fitch shared last week its intent to rate SoFi’s RMBS transaction that included 270 loans with a total balance of approximately $168.79 million. The group of loans consists of prime fixed-rate mortgages originated on the SoFi online lending platform.

Fidelity gives BlackRock an early leg up in robo advice brawl (Reuters), Rated: A

Fidelity Investments unintentionally boosted BlackRock Inc’s prospects as a robo adviser with a small investment in a start-up company that BlackRock bought last year for an estimated $150 million.

BlackRock and Fidelity are only in the early stages of what is shaping up as a battle royale to become the go-to provider of cheap automated financial advice over the Internet.

Although rivals currently dominate the robo advising space, investment behemoths Fidelity and BlackRock are expected to grow quickly. BlackRock’s FutureAdvisor now has more than $1 billion in assets under management, while Boston-based Fidelity’s digital wealth manager, Fidelity Go, is still getting off the ground, with only a nominal amount of assets. Fidelity has yet to launch a full marketing campaign.

Still, Fidelity could overtake BlackRock next year because it has a built-in advantage that many rivals, including BlackRock, do not have: an online brokerage with 17.4 million retail accounts. Some 96 percent of those accounts don’t currently have any sort of management and Fidelity is ideally placed to woo them over to Fidelity Go.

Meanwhile, the U.S. robo industry’s early leader is Vanguard Group. Its robo business has 60-percent market share with $41 billion in assets. Charles Schwab Corp, which has 7 million fewer brokerage accounts than Fidelity, is No. 2 with $10.2 billion in assets after only 19 months since launching its robo product. Click here for a list of the top U.S. robo advisers: (tmsnrt.rs/2hy0z4S).

Lending Club CTO Resigns (Crowdfund Insider), Rated: A

Lending Club (NYSE:LC) filed an 8K yesterday indicating that Chief Technology Officer John MacIlwaine had submitted his resignation on December 15th. MacIlwaine decided to depart from Lending Club to pursue another opportunity.  Lending Club stated that Richard Southwick, Senior Vice President for Technology, will oversee the Company’s technology development and operations while they conduct a search for a new Chief Technology Officer.

Fast-cash loans are wild west for small business (App.com), Rated: A

As a result, these new lenders can – and often do – charge sky-high interest rates and pile on fees, often hidden from the borrower. A short-term loan can turn into a long-term nightmare.Some problems identified in the Harvard Business School report:

  • High costs. Lenders commonly charge APRs (annual percentage rates) above 50 percent and can easily reach over 300 percent.
  • Double dipping. Repeat borrowers incur additional fees each time they renew their loans.
  • Hidden prepayment charges. Unlike traditional loans, many alternative lenders require payment of the full interest even when loans are repaid early.
  • Misaligned broker incentives. Small-business loan brokers often recommend the most expensive loans because they earn the highest fees on those.
  • Stacking. Multiple lenders provide loans to the same borrower, resulting in additional and hidden fees.

What the Harvard Business School Report recommends:

  • Mandatory disclosure of APRs, fees, default rates and borrower satisfaction.
  • A national regulation option – rather than state-by-state.
  • Increased borrower protections for small-business owners.
  • Rules/guidance on partnerships between banks and new lenders.
  • Brokers/platforms to have a “fiduciary” duty toward borrowers, meaning they must act in the borrowers’ best interests and disclose conflicts of interest.

Bizfi Joins Forces With LendingTree For Small Business Grant Contest (Crowdfund Insider), Rated: A

Less than a week after LendingTree launched its $50,000 small business grant contest; Bizfi announced it has teamed up with the online lender for the contest. According to Bizfi, LendingTree is one of the 45 funding partners of its marketplace for small business finance.

Peer-to-Peer Lending Market – Top Vendors (SAT PR News), Rated: A

The research report published by Transparency Market Research states that the opportunity in the global P2P lending market was worth US$26.16 bn in 2015. Analysts predict that the market valuation will reach US$897.85 bn by 2024, as it expands at a significant CAGR of 48.2% from 2016 to 2024.

The reducing interest in conventional banking, increasing dependency on online platforms, and recent history of financial crisis in this region has prompted P2P lending market to take lead cater to the unmet financial demands of the population. Meanwhile, the P2P lending market is estimated to show rapid progress in Asia Pacific. The emerging economies of China, India, Japan, and Australia will make a significant contribution to the rise of this market in Asia Pacific. The primary growth driver for this region will also be small businesses that will seek financial alternatives to fund their projects.

Even Financial’s Phill Rosen on P2P Lending Industry’s Future: I Think We Will See Some Consolidation in the Space (Crowdfund Insider), Rated: A

Earlier this week, fintech firm Even Financial announced it increased loan originations by 205% quarter over quarter since the beginning of 2016 and surpassed $1.5 billion in loan requests. The company has experienced solid growth since it was founded in 2014.

Crowdfund Insider: What borrower categories are you seeing the most interest on EVEN?

Rosen: Aside from debt consolidation which is the top purpose across the industry, we see high demand in weddings, auto and home improvement

Crowdfund Insider: What is the average size loan requested?

Rosen: Across all purposes, $10,551.00

How to earn interest on your Bitcoin – P2P Lending with Bitbond (Deep Dot Web), Rated: A

Before we start, a few guidelines would be to stay away from any model that offers ridiculous interest rates like 1% per day or 10% per month. The same can be said for any model that is not transparent on how they get this interest or that simply state that profits comes from trading. Finally, do your research. A simple google search can make the difference.

Bibond is a peer-to-peer lending website that allows you to lend both Bitcoin and national currencies for an interest. The major difference between the two former websites (Poloniex and Magnr) and Bibond is that with Bibond you’ll be lending your funds directly to other users. There is no failsafe mechanism for stopping users from taking your money and leaving. Forever.

However, this isn’t the norm as users are required to reveal their personal information and to back it up with the ownership of social media accounts, ebay, and so on. The borrowers are ranked from A to F according to risk. The lower the risk, the lower the interest you’ll receive and vice-versa.

In the case of an unpaid loan, Bibond will provide you with all the necessary information to take legal action agains the borrower or Bibond will sell the claim for the loan to a debt collection agency. The latter is usually better for lenders but it requires the amount to be above a certain threshold which varies according to the location of the borrower (usually 1.0 BTC or more in the developed world and 0.5 BTC or more in emerging markets).

Social impact investing is an alternative way to do good (MarketWatch), Rated: A

In most cases, the investments are still limited to the wealthy or accredited investors, but that is changing, and crowdfunding is expected to alter the playing field even further. Calvert Investments, for example, offers a high social impact investments program in which investors can put as little as $20 into local projects.

For non-accredited investors looking for other options to invest for social impact, Hoyt mentions Kiva.org, which offers peer-to-peer lending through zero-interest notes and CuttingEdgeX, a clearinghouse listing direct public offerings for social enterprises needing to raise capital.

United Kingdom

Zopa’s investment limit lifts (altfi), Rated: AAA

Zopa, the original peer-to-peer lending platform, has lifted its recently enforced platform limit. The firm is once again accepting new money transfers, with £4.2m in capacity.

Although the investment limit has been temporarily lifted, Zopa’s usual run-rate would suggest that the £4.2m of space will be filled within a few short days. Zopa has lent out £56.9m during the past four weeks.

Growth Street’s James Sherwin-Smith: Over £34M Has Been Matched on Platform to Date (Crowdfund Insider), Rated: A

Growth Street announced last week it would not accept individual retail investors on its peer to peer lending platform. They may do this now as they are an FCA registered Appointed Representative pursuant to a partnership with another firm. 

Crowdfund Insider: What makes Growth Street stand out from other peer-to-peer lending platforms?  

Sherwin-Smith: Growth Street is the only P2P platform offering revolving credit, which we provide in the form of secured business overdrafts. Borrowers share their performance data with Growth Street on an ongoing basis.

Loan Danger: 25% Fall Out With Friends Over Money (Voice-Online), Rated: A

ALMOST ONE in four of us have fallen out with friends over money issues and 42% have lent money to a friend only for it never to be returned, according to new research out today.

The study found that 74% of us have lent money over the past 12 months, with half of us lending up to £500 and nearly one in 20 (4%) having lent over £5,000.

The UK social lending industry – loans between friends & family – is estimated to be worth over £2.9 billion a year.

Most (95%) of us have never charged interest to anyone we know, but half would consider doing so and feel it is acceptable to charge interest to those that we personally know (47%).

European Union

Popular Fintech Companies in France (TechBullion), Rated: B

Younited Credit is one of the biggest fintech start-ups in France, operating peer-to-peer lending platform recognized by the French central bank.

Lendix is an online marketplace for business loans, allowing investors to advance money directly to SMEs.
Ulule is a leading crowdfunding site created by Thomas Boucherot and Alexander in 2010. Since its launch, the company has funded thousands of projects in many fields, from music creation to audiovisual.

Founded by Ombline Lasseur, Adrien Aumont and Vincent Ricordeau in 2009, Kisskissbankbank provides a crowdfunding platform for athletes, humanists, and creatives to raise funds for their projects.

Created in 2012, SmartAngels is a crowdfunding platform that allows retail investors and professionals to fund start-ups and SMEs.

Founded in 2007, MyMajorCompany allows music fans and internet users to invest in their preferred artists’ projects.

Ledger is a start-up that combines its strong expertise in smart card, cryptography, security,  and embedded hardware. The launch of a hardware wallet, Ledger Nano, in over  80 countries established the company as a reference in the global bitcoin ecosystem.

Founded in 2011, Paymium is a European web-based exchange that allows all bitcoin transactions between traders and consumers.

Founded in 2012 by Camille Tyan and Antoine Grimaud, PayPlug is  the first service in France to allow small merchants and professionals to accept credit card payments with simple tools, no monthly costs, and signup fee.

Fundovino is the first crowdfunding platform devoted to the world of wine.

Weeleo is a P2P platform that enables the exchange of cash currencies.

Australia

REST’s industry-first online super advice product gives members ‘mobile first’ access to personalised financial advice (Professional Planner), Rated: AAA

REST Industry Super today became the first Australian super fund to provide its 1.9 million members with ‘mobile first’ access to personalised financial advice with the launch of the REST Advice Online platform.

REST Advice Online is delivered on Midwinter’s next generation Advice Operating System (AdviceOS) and provides REST members with the ability to receive instant financial advice and make immediate changes to their super account from any mobile device.

The digital advice offering leverages Midwinter’s Digital Advice technology which means that regardless of which method REST members choose to receive advice (phone based, web chat or self-service), it is delivered, recorded and processed from the same integrated advice system.

Hayden steps into new COO role (Australian Broker), Rated: B

Digital home loan marketplace HashChing has appointed Siobhan Hayden, former CEO of the Mortgage & Finance Association of Australia (MFAA), as its new COO.

India

Uberisation disrupts multiple sectors (Times of India), Rated: B

The financial services industry is also undergoing transformation with digital. Crowdfunding startups like Ketto and Wishberry and peer-to-peer lending platforms like Faircent, Lendbox and i2ifunding are offering platforms to connect people who have a cause or a financial need with those who have excess funds to lend.

Asia

Vietnam: P2P lending startup Tima gets funding from Singapore investor (Deal Street Asia), Rated: AAA

Vietnamese P2P lending startup Tima has closed a US dollar 7-figure series A funding from a Singapore fund to accelerate service growth in the local market, a senior executive of the company told this portal.

Launched in 2015, the platform has seen cumulative money from its lender partners reach over VND2.5 trillion ($115.45 million).

About 80 per cent of loan seekers based in Vietnam do not have prompt access to financial services, says a World Bank report. P2P lending, still a fledging business in the country, is said to be a solution in addressing this gap.

In Vietnam, fintech has started to emerge as one of the most favourite verticals for startups and investors, fueled by the increasing mobility yet unbanked population in the country.

Africa

Nigerian Fintech Startup Paystack Raises .3 Million (Forbes),Rated: A

Paystack, one of Nigeria’s most hotly anticipated tech start-ups, has just secured $1.3M Seed investment from both international and homegrown investors. The company, founded by Shola Akinlade and Ezra Olubi, initially caught the eye of industry commentators as it was one the first Nigerian tech company to be accepted into the world-famous Y Combinator progam, based in Silicon Valley. Since then, having taken Paystack through Private beta, and securing $120,000 early-stage investment from Y Combinator, Akinlade [CEO] and Olubi [CTO] have quietly been building the company, working to secure this Seed investment round, whilst also building a network of partner merchants in Nigeria, over 1,500, who are now using the platform to accept online payments.

International

6 Fintech Players Changing the Face of Global Payments (Business2Community), Rated: A

A leading mobile payments company, iZettle offers small businesses portable point-of-sale solutions as well as free sales overview tools. This allows any individual or merchant to take card payments anywhere, anytime.

Another player in this space is Klarna, a Swedish e-commerce company that supplies payment services for online storefronts. The Klarna system eliminates the risks for buyers and sellers by taking over stores’ payment claims and by managing customer payments.

Consumer to business payment fintech is increasingly well established. But some fintech firms are looking to facilitate business to employee payment services.

Doreming, for instance, focuses on financial inclusion for workers, an emerging theme for fintech firms, with the World Bank estimating that 2.5 billion adults worldwide are excluded from traditional banking services.

Adyen is a multichannel payment company outsourcing financial transfer services to international merchants giving them a single solution to accept payments anywhere in the world.

Azimo is also an international money transfer service harbouring a large digital network that allows customers to send money to over 190 countries, from any internet-connected device.

Microfinance fintechs are riding a wave of popularity with their social media partners and increasingly facilitating the online sharing community. For example, Flattr, a fintech founded in 2010, enables users to ‘flattr’ creators for their digital content by clicking the Flattr-button next to their content. Each month, you add money to your account and at the end of the month your monthly budget is divided between all the things you flattered and sent to the creators.

Authors:

George Popescu
Allen Taylor